MSI — Audit Report / Information 2022

Nov 14, 2022

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2022 AND 2021

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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Representation Letter

In connection with the Consolidated Financial Statements of Affiliated Enterprises of MICRO-STAR INTERNATIONAL CO., LTD. and its subsidiaries (the “Consolidated FS of the Affiliates”), we represent to you that, the entities required to be included in the Consolidated FS of the Affiliates as of and for the year ended December 31, 2022 in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those required to be included in the Consolidated Financial Statements of MICRO-STAR INTERNATIONAL CO., LTD. and its subsidiaries (the “Consolidated FS of the Group”) in accordance with International Financial Reporting Standard 10. Additionally, the information required to be disclosed in the Consolidated FS of Affiliates is disclosed in the Consolidated FS of the Group. Consequently, MICRO-STAR INTERNATIONAL CO., LTD. and its subsidiaries do not prepare a separate set of Consolidated FS of Affiliates.

Very truly yours,

MICRO-STAR INTERNATIONAL CO., LTD. By

Joseph Hsu, Chairman March 14, 2023

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Opinion

We have audited the accompanying consolidated balance sheets of MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES (the “Group”) as of December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our ethical responsibilities in accordance with these requirements. Based on our audits and the audit reports of other independent auditors, we believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s consolidated financial statements for the year ended December 31, 2022 are stated as follows:

Recognition of sales revenue generated from own-brand products

Description

Please refer to Note 4(27) for accounting policies on revenue recognition. Other than international brands, the Group sells its products to customers in various countries. The Group also actively develops own-brand products. The recognition of sales revenue generated from own-brand products is critical to the Group’s consolidated financial statements. Therefore, it was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Obtained an understanding of and assessed internal controls in relation to sales revenue, and validated the operating effectiveness of those above-mentioned internal controls.

• B. Obtained detailed listing of sales revenue from own-brand products in the current year, and sampled to validate supporting documents, including sales invoices, customer purchase orders and delivery documents to ensure the appropriateness of recognition.

• C. Inspected contents and relevant evidences in relation to sales returns and discounts occurring subsequent to the reporting period.

• D. Performed accounts receivable confirmation procedure to significant customers.

Estimation of allowance for inventory valuation losses

Description

Please refer to Note 4(14) for accounting policies on inventory valuation, Note 5(2) for the uncertainty

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of accounting estimates and assumptions applied on inventory valuation, and Note 6(7) for details of inventories. As of December 31, 2022, the balances of inventories and allowance for inventory valuation losses are NT$30,480,028 thousand and NT$1,184,873 thousand, respectively.

The Group is primarily engaged in manufacturing and sales of motherboards, interface cards, notebook computers and other electronic products. Due to the rapid technological innovations and competition within the industry as well as frequent releases of new products resulting in potential price fluctuations, there is a higher risk of inventory losses due from market value decline or obsolescence. The Group recognises inventories at the lower of cost and net realisable value. The monetary values of allowance for inventory valuation losses is critical to the financial statements as of December 31, 2022. Therefore, it was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Inquired with management, and assessed the reasonableness in relation to the provision of allowance for inventory valuation losses.

• B. Validated the accuracy of the system logic in calculating the ageing of inventories, and confirmed the consistency with the Group’s policies.

• C. Validated the appropriateness of system logic of the report of individually identified obsolete inventory prepared by management and confirmed the consistency with the Group’s policies.

• D. Sampled and tested the net realisable value basis of the individual inventory and validated the appropriateness.

Other matter –Reference to audits of other independent auditors

We did not audit the financial statements of certain consolidated subsidiaries and investments accounted for under the equity method that are included in the consolidated financial statements. Those financial statements were audited by other independent auditors, whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on reports of the other independent auditors. Total assets of the above-mentioned entities (including investments accounted for under the equity method) amounted to NT$19,245,391 thousand and NT$21,787,195 thousand as of December 31, 2022 and 2021, constituting 22% and 21% of consolidated total assets, respectively. Sales revenue of the above-mentioned entities amounted to NT$46,950,980 thousand and

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NT$46,487,205 thousand for the years ended December 31, 2022 and 2021, constituting 26% and 23% of consolidated total sales revenue, respectively.

Other matter – Parent company only financial reports

We have audited and expressed an unmodified opinion with other matter section on the parent company only financial statements of MICRO-STAR INTERNATIONAL CO., LTD. as of and for the years ended December 31, 2022 and 2021.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including supervisors, are responsible for overseeing the Group’s financial reporting process.

Independent auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of

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China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgement and professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

6. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

7. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial

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statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Liang, Hua-Ling

[Lai, Chung-Hsi ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 14, 2023

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 6(5) 6(7) 6(8) 6(3) 6(4) and 8 6(9) 6(10) 6(12) 6(26)	December 31, 2022 AMOUNT % $ 27,475,487 32 297,392 - 454 - 179,588 - 18,826,732 22 298,360 - 6,171 - 29,295,155 34 2,219,118 3 78,598,457 91 71,791 - 654,607 1 5,522,073 6 633,607 1 96,348 - 1,142,233 1 133,787 - 8,254,446 9 $ 86,852,903 100	December 31, 2021	December 31, 2021
		AMOUNT $ 27,475,487 297,392 454 179,588 18,826,732 298,360 6,171 29,295,155 2,219,118 78,598,457 71,791 654,607 5,522,073 633,607 96,348 1,142,233 133,787 8,254,446 $ 86,852,903	AMOUNT $ 23,654,801 98,813 432 93,220 29,590,087 292,862 3,893 37,939,662 2,125,713 93,799,483 104,847 601,754 5,710,853 390,801 145,917 1,004,168 112,941 8,071,281 $ 101,870,764	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories, net 1410 Prepayments 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				23 - - - 29 1 - 37 2
				92
				- 1 6 - - 1 -
				8
				100

(Continued)

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2022 December 31, 2021 Notes AMOUNT % AMOUNT % 6(13) $ - - $ 2,000,000 2 6(2) 167,284 - 15,708 - 6(20) 1,297,414 2 455,924 - 24,670,649 28 33,931,186 33 6(14) 5,918,276 7 7,891,676 8 515,756 1 2,999,077 3 6(16) 1,139,739 1 1,203,497 1 222,272 - 192,852 - 3,600,984 4 4,733,204 5 108,411 - 694,474 1 37,640,785 43 54,117,598 53 6(26) 12,694 - 17,136 - 358,411 1 145,314 - 6(15) 169,988 - 211,818 - 272,436 - 298,578 1 813,529 1 672,846 1 38,454,314 44 54,790,444 54 6(17) 8,448,562 10 8,448,562 8 6(18) 805,068 1 804,516 1 6(19) 8,028,953 9 6,336,840 6 901,794 1 674,458 1 30,917,333 36 31,717,738 31 ( 703,121) ( 1) ( 901,794) ( 1 ) 48,398,589 56 47,080,320 46 48,398,589 56 47,080,320 46 $ 86,852,903 100 $ 101,870,764 100

Current liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2130 Current contract liabilities 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2250 Provision for liabilities - current 2280 Current lease liabilities 2365 Refund liabilities- current 2399 Other current liabilities, others 21XX Total current liabilities Non-current liabilities 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Net defined benefit liability, non- current 2670 Other non-current liabilities, others 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 3XXX Total equity 3X2X Total liabilities and equity

The accompanying notes are an integral part of these consolidated financial statements.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items

Year ended December 31 2022 2021 Notes AMOUNT % AMOUNT % 6(20) $ 180,411,242 100 $ 201,810,152 100 6(7)(24) ( 154,683,162) ( 86) ( 163,565,876) ( 81) 25,728,080 14 38,244,276 19 6(24) ( 8,884,636) ( 5) ( 11,203,377) ( 5) ( 1,704,253) ( 1) ( 1,873,387) ( 1) ( 4,396,924) ( 2) ( 5,179,451) ( 3) ( 46,381) - ( 13,417) - ( 15,032,194) ( 8) ( 18,269,632) ( 9) 10,695,886 6 19,974,644 10 6(4)(21) 145,683 - 72,045 - 6(22) 639,825 - 872,154 - 6(23) 840,529 1 ( 269,465) - ( 38,238) - ( 18,706) - 1,587,799 1 656,028 - 12,283,685 7 20,630,672 10 6(26) ( 2,321,165) ( 1) ( 3,709,667) ( 2) $ 9,962,520 6 $ 16,921,005 8 6(15) $ 34,392 - $ 150 - 6(3) ( 33,056) - ( 19,491) - 6(26) ( 266) - 9,395 - 1,070 - ( 9,946) - 225,117 - ( 217,270) - 225,117 - ( 217,270) - $ 226,187 - ($ 227,216) - $ 10,188,707 6 $ 16,693,789 8 $ 9,962,520 6 $ 16,921,005 8 $ 10,188,707 6 $ 16,693,789 8 6(27) $ 11.79 $ 20.03 $ 11.65 $ 19.78

4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit loss 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Actuarial gain on defined benefit plan 8316 Unrealised losses from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive (loss) income that will not be reclassified to profit or loss 8310 Components of other comprehensive gain (loss) that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Total other comprehensive income (loss) for the year 8500 Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent Comprehensive income attributable to: 8710 Owners of the parent Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Equity attributable to owners of the parent

2021 Balance at January 1, 2021 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriation of 2020 earnings Legal reserve Special reserve Cash dividends Due to donated assets received Balance at December 31, 2021 2022 Balance at January 1, 2022 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriation of 2021 earnings Legal reserve Special reserve Cash dividends Due to donated assets received Balance at December 31, 2022	Notes		Share capital - common stock				Capital surplus	Capital surplus	Capital surplus						Retained earnings	Retained earnings		Other equityi	nterest		Total equity
					Additional paid-in capital		Treasury stock transactions		Donated assets received	Employee stock warrants			Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(19) 6(19)		$ 8,448,562 - - - - - - - $ 8,448,562 $ 8,448,562 - - - - - - - $ 8,448,562		$ 628,134 - - - - - - - $ 628,134 $ 628,134 - - - - - - - $ 628,134		$ 130,592 - - - - - - - $ 130,592 $ 130,592 - - - - - - - $ 130,592		$ 1,028 - - - - - - 302 $ 1,330 $ 1,330 - - - - - - 552 $ 1,882		$ 44,460 - - - - - - - $ 44,460 $ 44,460 - - - - - - - $ 44,460		$ 5,541,298 - - - 795,542 - - - $ 6,336,840 $ 6,336,840 - - - 1,692,113 - - - $ 8,028,953	$ 794,525 - - - - ( 120,067 ) - - $ 674,458 $ 674,458 - - - - 227,336 - - $ 901,794		$ 20,625,711 16,921,005 120 16,921,125 ( 795,542 ) 120,067 ( 5,153,623 ) - $ 31,717,738 $ 31,717,738 9,962,520 27,514 9,990,034 ( 1,692,113 ) ( 227,336 ) ( 8,870,990 ) - $ 30,917,333		($ 646,821 ) - ( 217,270 ) ( 217,270 ) - - - - ($ 864,091 ) ($ 864,091 ) - 225,117 225,117 - - - - ($ 638,974 )	($ 27,637 ) - ( 10,066 ) ( 10,066 ) - - - - ($ 37,703 ) ($ 37,703 ) - ( 26,444 ) ( 26,444 ) - - - - ($ 64,147 )	$ 35,539,852 16,921,005 ( 227,216 ) 16,693,789 - - ( 5,153,623 ) 302 $ 47,080,320 $ 47,080,320 9,962,520 226,187 10,188,707 - - ( 8,870,990 ) 552 $ 48,398,589

The accompanying notes are an integral part of these consolidated financial statements.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation (including right-of-use assets and investment properties) Amortization Expected credit loss Net loss (gain) on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Loss (gain) on disposal of property, plant and equipment (Gain) loss on lease modification Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes receivable, net Accounts receivable Other receivables Inventories, net Prepayments Other non-current assets Changes in operating liabilities Current contract liabilities Accounts payable Other payables Provision for liabilities - current Refund liabilities- current Other current liabilities, others Net defined benefit liability Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2022 2021 $ 12,283,685 $ 20,630,672 6(24) 1,402,814 1,240,284 6(24) 439 162 46,381 13,417 50,058 ( 125,652 ) 38,238 18,706 6(21) ( 145,683 ) ( 72,045 ) 6(23) 748 ( 862 ) 6(10) ( 196 ) 806 ( 97,029 ) 127,713 ( 86,368 ) 20,067 10,713,349 ( 7,537,037 ) ( 215 ) ( 26,646 ) 8,644,507 ( 10,457,125 ) ( 93,405 ) ( 318,200 ) ( 36,736 ) 2,883 841,490 192,772 ( 9,260,537 ) 6,753,435 ( 1,972,776 ) 2,548,121 ( 63,758 ) 353,062 ( 1,132,220 ) 1,177,412 ( 586,063 ) 436,026 ( 7,438 ) ( 8,346 ) ( 56,718 ) 87,161 20,482,567 15,056,786 140,624 71,732 ( 39,627 ) ( 19,392 ) ( 4,944,268 ) ( 2,496,210 ) 15,639,296 12,612,916

(Continued)

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortised cost Proceeds from disposal of financial assets at amortised cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of investment properties Decrease (increase) in refundable deposits Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Repayment of the principal portion of lease liabilities Payment of long-term borrowings Increase (decrease) in guarantee deposits received Cash dividends paid Due to donated assets received Net cash flows used in financing activities Effect of exchange rate Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2022 2021 ($ 52,875 ) $ - - 625,198 6(9) ( 821,223 ) ( 1,560,688 ) 1,203 2,065 6(12) ( 512 ) ( 914 ) 31,068 ( 34,300 ) ( 842,339 ) ( 968,639 ) ( 2,000,000 ) ( 1,000,000 ) ( 295,601 ) ( 243,022 ) - ( 13,786 ) 30,576 ( 966 ) 6(19) ( 8,870,990 ) ( 5,153,623 ) 552 302 ( 11,135,463 ) ( 6,411,095 ) 159,192 ( 164,336 ) 3,820,686 5,068,846 6(1) 23,654,801 18,585,955 6(1) $ 27,475,487 $ 23,654,801

The accompanying notes are an integral part of these consolidated financial statements.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

MICRO-STAR INTERNATIONAL CO., LTD. (the “Company”) was incorporated as a company limited by shares under the laws of the Republic of China (R.O.C.) in August 1986 and started its operations in the same year. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the manufacture and sale of motherboards and computer hardware. The shares of the Company have been listed on the Taiwan Stock Exchange since October 1998. The Company is the Group’s ultimate parent company.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 14, 2023.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new standards and amendments to International Financial Reporting Standards (“IFRS”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments that came into effect as endorsed by the FSC effective from 2022 are as follows:

effective from 2022 are as follows:
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts— cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

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(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

follows:
	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	Standards Board
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

==> picture [482 x 48] intentionally omitted <==

----- Start of picture text -----

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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endorsed by the FSC are as follows: New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information'
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2024
current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024

The above standards and interpretations have no significant impact to the Group’s financial condition

and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

~17~

• (d) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiaries	Main business activities	Ownership(%)	Ownership(%)	Note
			2022/12/31	2021/12/31
MICRO-STAR INTERNATIONAL CO., LTD. 〃 〃 〃 〃 〃 〃 MSI (HOLDING)	MICRO-STAR NETHERLANDS HOLDING B.V. [MSI (HOLDING)] MSI COMPUTER CORP. [MSI (LA)] MSI PACIFIC INTERNATIONAL HOLDING CO., LTD. [MSI (PACIFIC)] MSI COMPUTER JAPAN CO., LTD. [MSI (JAPAN)] MSI COMPUTER (AUSTRALIA) PTY. LTD. [MSI (AUSTRALIA)] MSI COMPUTER (CAYMAN) CO., LTD. [MSI COMPUTER (CAYMAN)] MICRO-STAR CANADA LTD. [MSI (CANADA)] MYSTAR COMPUTER B.V. [MYSTAR]	Holding company Sales and after-sales service of computers and electronic components Holding company Sales support and after-sales service of computers and electronic components 〃 Holding company Sales support and after-sales service of computers and electronic components Sales support of computers and electronic components	100 100 100 100 100 100 100 100	100 100 100 100 100 100 100 100	B 〃 A 〃 〃 B A B

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Main business Ownership(%)
Name of investor Name of subsidiaries activities 2022/12/31 2021/12/31 Note
----- End of picture text -----

Name of investor	Name of subsidiaries	activities	2022/12/	31	2021/12/31	Note
MSI (HOLDING)	MSI COMPUTER SARL	Sales support of	100		100	B
	[MSI (SARL)]	computers and
		electronic components
〃	MSI COMPUTER (UK)	〃	100		100	〃
	LTD. [MSI (UK)]
〃	MSI POLSKA SP. Z O. O.	Sales support and	99		99	〃
	[MSI (POLSKA)]	after-sales services of
		computers and
		electronic components
〃	MSI COMPUTER	Logistics services of	100		100	〃
	EUROPE B.V.	computers and
	[MSI (EUROPE)]	electronic components
〃	LLC MSI COMPUTER	Sales support and	99		99	〃
	[MSI (RUSSIA)]	after-sales service of
		computers and
		electronic components
〃	MSI COMPUTER	Sales support of	99		99	B and C
	TECHNOLOGIES	computers and
	LIMITED COMPANY	electronic components
	[MSI (TURKEY)]
〃	MSI ITALY S.R.L.	〃	100		100	B
	[MSI (ITALY)]
〃	MSI IBERIA S.L.	〃	100		100	〃
	[MSI (IBERIA)]
MSI (EUROPE)	MSI POLSKA SP. Z O. O.	Sales support and	1		1	〃
	[MSI (POLSKA)]	after-sales services of
		computers and
		electronic components
〃	LLC MSI COMPUTER	〃	1		1	〃
	[MSI (RUSSIA)]
〃	MSI COMPUTER	Sales support of	1		1	B and C
	TECHNOLOGIES	computers and
	LIMITED COMPANY	electronic components
	[MSI (TURKEY)]
MSI (PACIFIC)	MSI KOREA CO.,	Sales and after-sales	100		100	B
	LTD. [MSI (KOREA)]	service of computers
		and electronic
		components
〃	STAR INFORMATION	Holding company		-	100	A and D
	HOLDING CO., LTD.
	[STAR INFORMATION]

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Main business Ownership(%)
Name of investor Name of subsidiaries activities 2022/12/31 2021/12/31 Note
----- End of picture text -----

Name of investor	Name of subsidiaries	activities	2022/12/31	2021/12/31	Note
MSI (PACIFIC)	MICRO-STAR	Holding company	100	100	A
	INTERNATIONAL
	(B.V.I) HOLDING
	CO., LTD. [MSI (B.V.I.)]
〃	MICRO ELECTRONICS	〃	100	100	〃
	HOLDING CO., LTD.
	[MICRO ELECTRONICS]
〃	MEGA TECHNOLOGY	〃	100	100	〃
	HOLDING CO., LTD.
	[MEGA TECHNOLOGY]
〃	MEGA COMPUTER CO.,	Sales support of	100	100	B
	LTD. [MEGA	computers and
	COMPUTER]	electronic components
〃	MHK INTERNATIONAL	〃	100	100	〃
	CO., LTD. [MSI (MHK)]
〃	MSI (SHANGHAI) CO.,	Sales and after-sales	100	100	A
	LTD. [MSI (SHANGHAI)]	service of computers
		and electronic
		components
〃	SHENZHEN MEGA	After-sales service of	100	100	〃
	INFORMATION CO.,	computers, and
	LTD. [SHENZHEN	electronic components
	MEGA INFORMATION]
MICRO	MSI ELECTRONICS	Manufacture and	100	100	〃
ELECTRONICS	(KUNSHAN) CO., LTD.	after-sales service of
	[MSI ELECTRONICS	computers, and
	(KUNSHAN)]	electronic components
MSI (B.V.I.)	MSI COMPUTER	Manufacture and	100	100	〃
	(SHENZHEN) CO., LTD.	after-sales service of
	[MSI COMPUTER	computers, and
	(SHENZHEN)]	electronic components
MEGA	RAIDEALS INC.	Sales computers	100	100	〃
TECHNOLOGY	[RAIDEALS]	and electronic
		components

Note A: These investee companies are included in the consolidated financial statements based on their financial statements which were audited by the Group’s independent auditors for the corresponding period.

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  - Note B:  There investee companies are included in the consolidated financial statements based on their financial statements which were audited by other independent auditors for the corresponding period.

  - Note C:  The subsidiary is in the process of liquidation.

  - Note D:  On April 13, 2022, this subsidiary has cancelled its registration.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

• (4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

~21~

• i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

• ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

• iii. All resulting exchange differences are recognised in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realized within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settle within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term highly liquid investments that readily convert to known amount of cash and subject to an insignificant effect of value of changes in rate. Time deposits and money market fund that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(7) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

~22~

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• (8) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

• (b) The assets’ contractual cash flows represents solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

• The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (9) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(11) Impairment of financial assets

• For financial assets measured at amortised cost including accounts receivable that have a significant financing component, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

The Group derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.

－ (13) Leasing arrangements (lesser) Operating leases

Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

• (14) Inventories

• Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work-in-process comprises raw materials, direct labour, other direct costs and related production overheads. The item-by-item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(15) Property, plant and equipment

• A Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

~24~

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 3~55 years Machinery and equipment 1.5~10 years Other properties (includes transportation equipment, office equipment, 1.5~10 years and leasehold improvements)

(16) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are mainly fixed payments, less any lease incentives that can be received.

  • The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost mainly comprising the amount of the initial measurement of lease liability.

  • The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

• (17) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 20 years.

~25~

(18) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

• (19) Borrowings

Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(20) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

(22) Provisions

• Provisions of warranties are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

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(23) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees, and should be recognised as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans

  - i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised past service costs. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).

  - ii. Remeasurement arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

  - iii. Past service costs are recognised immediately in profit or loss.

• C. Termination benefits

• Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

• D. Employees’ compensation and directors’ and supervisors’ remuneration Employees’ remuneration and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

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(24) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

• D. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

• (25) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

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(26) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Board of Directors. Cash dividends are recorded as liabilities.

• (27) Revenue recognition

• A. Sales of goods

  • (a) The Group manufactures and sells motherboards, graphic card products, a variety of computer hardware, and electronic components. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

  • (b) Revenue from the products is recognised based on the price specified in the contract, net of the estimated value added tax, returns and volume discounts and rebates. The volume discounts to the customers are estimated based on the anticipated annual sales quantities and the right of return for defective products is estimated on the basis of historical experience. Revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. The period between the transfer of the promised goods or services to the customer and payment by the customer does not exceed one year. As a result, the Group does not adjust any of the transaction prices for the time value of money.

  • (c) The Group’s obligation to provide a refund for faulty products under the standard warranty terms is recognised as a provision.

  • (d) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Incremental costs of obtaining a contract

  • Given that the contractual period lasts less than one year, the Group recognises the incremental costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

(28) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

~29~

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. The information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

• None.

(2) Critical accounting estimates and assumptions

• Evaluation of inventories

• As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation. As of December 31, 2022, the carrying amount of inventories was $29,295,155.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

inventories was $29,295,155. TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and petty cash Checking accounts and demand deposits Time deposits Total	December31,2022 4,218 $ 17,846,069 9,625,200 27,475,487 $	December31,2021
		2,914 $ 16,623,197 7,028,690
		23,654,801 $

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Group’s time deposits with maturity periods over three months or pledged to others are reclassified as “financial assets at amortised cost.” Details of financial assets at amortised cost are provided in Notes 6(4) and 8.

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(2) Financial assets and liabilities at fair value through profit or loss - current

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Asset items December 31, 2022 December 31, 2021
Financial assets mandatorily measured at fair value
through profit or loss
-
Stock of publicly traded or listed companies $ 106,200 $
Derivatives – Forward exchange contract 6,426 40,175
Derivatives – Foreign exchange swap 193,364 58,638
305,990 98,813
-
Evaluation adjustment ( 8,598)
Total $ 297,392 $ 98,813
Liability items December 31, 2022 December 31, 2021
Financial liabilities held for trading
Derivatives – Forward exchange contract $ 167,284 $ 15,708
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• A. Amounts recognised in profit or loss in relation to financial assets and liabilities at fair value through profit or loss are listed below:

through profit or loss are listed below:
2022 Financial assets and liabilities mandatorily measured at fair value through profit or loss Equity instruments 542 $ Derivatives 1,042,669) ( 1,042,127) ($	2021
	17,959 $ 474,823
	492,782 $

• B. The Group entered into contracts related to derivative financial assets and liabilities which were not accounted for under hedge accounting. The contract information are as follows:

Derivative Financial Assets		December	31,2022
		Contract Amount Notional Principal (In thousands) 172,308 CNY 4,800 GBP 7,500 CAD 6,136 SEK 450,000 USD	Contract period
Forward exchange contracts 〃 〃 〃 Foreign exchange swap			2022.12.05~2023.05.24 2022.12.07~2023.03.01 2022.11.07~2023.03.24 2022.12.02~2023.03.01 2022.10.05~2023.03.16

~31~

Derivative Financial Liabilities	Contract Amount Notional Principal (In thousands) 7,000 AUD 446,901 CNY 39,000 EUR 4,300 GBP 292,820 JPY 31,827,600 KRW Contract Amount Notional Principal (In thousands) 1,000 AUD 8,000 CAD 666,825 RUB 60,000 EUR 324,000 USD 509,265 CNY Contract Amount Notional Principal (In thousands) 14,500 GBP 15,000 AUD 13,621 SEK 48,000 EUR December December December	Contract period 31,2022
Forward exchange contracts 〃 〃 〃 〃 〃 Derivative Financial Assets		2022.10.31~2023.02.01 2022.10.14~2023.05.24 2022.09.29~2023.05.24 2022.11.30~2023.03.31 2022.12.28~2023.01.31 2022.11.29~2023.03.15 Contract period 2021.10.27~2022.01.10 2021.10.12~2022.02.24 2021.12.09~2022.01.18 2021.10.14~2022.04.01 2021.12.14~2022.05.09 2021.08.12~2022.04.19 31,2021 31, 2021
Forward exchange contracts 〃 〃 〃 Foreign exchange swap 〃 Derivative Financial Liabilities
		Contractperiod
Forward exchange contracts 〃 〃 〃		2021.12.13~2022.02.24 2021.12.08~2022.02.24 2021.12.29~2022.02.08 2021.12.06~2022.03.24

The Group entered into forward foreign exchange contracts to hedge exchange risk. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• C. The Group has no financial assets at fair value through profit or loss pledged to others.

• D. Information relating to price risk and fair value of financial assets at fair value through profit or loss is provided in Note 12(2)(3).

(3) Financial assets at fair value through other comprehensive income

Items		December	31,2022		December	31,2021
Non-current items:
Equity instruments
Unlisted stocks		$	151,975		$	151,975
Valuation adjustment	(		80,184)	(		47,128)
Total		$	71,791		$	104,847

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• A. The Group has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $71,791 and $104,847 as at December 31, 2022 and 2021, respectively.

• B. As at December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group were $71,791 and $104,847, respectively.

• C. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

• D. Information relating to price risk and fair value of financial assets at fair value through other comprehensive income is provided in Note 12(2)(3).

(4) Financial assets at amortised cost

Financial assets at amortised cost
Items Current items: Time deposits over three months Non-current items: Pledge bank deposits Others Total	December31,2022 454 $ 650,401 $ 4,206 654,607 $	December31,2021
		432 $
		599,638 $ 2,116
		601,754 $

• A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:

below:
2022 Interest income 17,914 $	2021
	15,651 $

• B. As at December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group were $655,061 and $602,186, respectively.

• C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

• D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

• The counterparties of the Group’s investments in certificates of deposits are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote.

(5) Notes and accounts receivable

Notes and accounts receivable
		December31,2022			December31,2021
Notes receivable		$	179,588		$	93,220
Accounts receivable		$	18,905,127		$	29,618,475
Less: Allowance for doubtful accounts	(		78,395)	(		28,388)
		$	18,826,732		$	29,590,087

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A. The ageing analysis of accounts receivable and notes receivable:

Accounts Notes receivable receivable Not past due 14,146,762 $ 179,588 $ 1 to 75 days 4,455,391 - 76 to 365 days 278,741 - Over 365 days 24,233 - 18,905,127 $ 179,588 $ December31,2022	Accounts Notes receivable receivable 24,554,824 $ 93,220 $ 4,985,343 - 77,658 - 650 - 29,618,475 $ 93,220 $ December31,2021

The above ageing analysis was based on past due date.

• B. As of December 31, 2022 and 2021, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2021, the balance of receivables (include notes receivable) from contracts with customers amounted to $22,196,874.

• C. Most of the Group’s accounts receivable have been insured or have collateral as security, and the Group will be able to obtain insurance claims or enforce a collateral in case these accounts default.

• D. As of December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable were $179,588 and $93,220; $18,826,732 and $29,590,087, respectively.

• E. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(6) Transfer of financial assets

Transferred financial assets that are derecognised in their entirety

The Group entered into a factoring agreement with a bank to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable, but is liable for the losses incurred on any business dispute. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognised the transferred accounts receivable, and the related information is as follows:

	December31,2022	December31,2022	December31,2022
Purchaser of accounts receivable	Accounts receivable transferred	Amount derecognised	Amount advanced	Amount available for advance	Interest rate of amount advanced
Mega International Commercial Bank Taishin International Bank	260,669 $ 107,032	260,669 $ 107,032	- $ -	- $ -

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		December31,2021	December31,2021	December31,2021	December31,2021
Purchaser of		Accounts						Amount	Interest rate of
accounts	receivable			Amount	Amount		available for		amount
receivable	transferred		derecognised		advanced			advance	advanced
Mega International
Commercial Bank	$	253,096	$	253,096	$	-	$	-
Taishin International Bank		110,560		110,560		-		-

(7) Inventories

Inventories Taishin International Bank	110,560 110,	560 -	-
Raw materials Work-in-process Finished goods Raw materials Work-in-process Finished goods	Cost 7,333,816 $ 1,938,064 21,208,148 30,480,028 $	Allowance for valuation loss 172,673) ($ 5,184) ( 1,007,016) ( 1,184,873) ($ December31,2022 December 31, 2021	Bookvalue 7,161,143 $ 1,932,880 20,201,132
			29,295,155 $
	Cost 15,212,486 $ - 23,279,771 38,492,257 $		Bookvalue
			15,092,884 $ - 22,846,778
			37,939,662 $

The cost of inventories recognised as expense for the period:

The cost of inventories recognised as expense for the period:
2022 Cost of inventories recognised as expense 154,683,162 $ Losses of decline in market value 608,004	2021
	163,565,876 $ 71,501

As the Group sold certain inventories whose net realizable value was lower than its cost, the allowance for inventory obsolescence and market price decline was reversed for the year ended December 31, 2021.

(8) Prepayments

Office supplies Overpaid tax for offsetting the future tax payable Prepayment for goods Others	December31,2022 928,289 $ 899,190 2,782 388,857 2,219,118 $	December 31, 2021
		820,829 $ 922,305 42,257 340,322
		2,125,713 $

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(9) Property, plant and equipment

									2022
			Land			Buildings		Machineries				Others			Total
At January 1
Cost		$	1,452,444		$	5,752,635		$	4,259,943		$	2,142,379		$	13,607,401
Accumulated depreciation			-	(		4,154,909)	(		2,192,522)	(		1,549,117)	(		7,896,548)
		$	1,452,444		$	1,597,726		$	2,067,421		$	593,262		$	5,710,853
Balance at January 1		$	1,452,444		$	1,597,726		$	2,067,421		$	593,262		$	5,710,853
Additions			-			73,336			285,654			462,233			821,223
Reclassifications			-			55,764			176,503	(		235,365)	(		3,098)
Disposals			-	(		954)	(		33)	(		964)	(		1,951)
Depreciation charge			-	(		286,218)	(		557,081)	(		223,407)	(		1,066,706)
Net exchange differences			8,386			15,959			28,476			8,931			61,752
Balance at December 31		$	1,460,830		$	1,455,613		$	2,000,940		$	604,690		$	5,522,073
At December 31
Cost		$	1,460,830		$	6,054,186		$	4,721,046		$	2,336,730		$	14,572,792
Accumulated depreciation			-	(		4,598,573)	(		2,720,106)	(		1,732,040)	(		9,050,719)
		$	1,460,830		$	1,455,613		$	2,000,940		$	604,690		$	5,522,073
									2021
			Land			Buildings		Machineries				Others			Total
At January 1
Cost		$	1,462,807		$	5,635,658		$	3,239,657		$	1,906,219		$	12,244,341
Accumulated depreciation			-	(		3,895,827)	(		1,798,346)	(		1,420,074)	(		7,114,247)
		$	1,462,807		$	1,739,831		$	1,441,311		$	486,145		$	5,130,094
Balance at January 1		$	1,462,807		$	1,739,831		$	1,441,311		$	486,145		$	5,130,094
Additions			-			75,957			1,096,886			387,845			1,560,688
Reclassifications			-			62,243			2,609	(		55,106)			9,746
Disposals			-			-	(		85)	(		1,118)	(		1,203)
Depreciation charge			-	(		264,304)	(		463,809)	(		219,785)	(		947,898)
Net exchange differences	(		10,363)	(		16,001)	(		9,491)	(		4,719)	(		40,574)
Balance at December 31		$	1,452,444		$	1,597,726		$	2,067,421		$	593,262		$	5,710,853
At December 31
Cost		$	1,452,444		$	5,752,635		$	4,259,943		$	2,142,379		$	13,607,401
Accumulated depreciation			-	(		4,154,909)	(		2,192,522)	(		1,549,117)	(		7,896,548)
		$	1,452,444		$	1,597,726		$	2,067,421		$	593,262		$	5,710,853

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－ (10) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings, machinery and equipment, and other equipment. Rental contracts are typically made for periods of 3 months to 9 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

borrowing purposes. The carrying amount of right-of-use assets and the	depreciation charge are	as follows:
Land Buildings Machinery and equipment Other equipment Land Buildings Machinery and equipment Other equipment	December31,2022 Carrying amount 55,729 $ 536,100 6,151 35,627 633,607 $ 2022 Depreciation charge 1,906 $ 268,942 2,596 22,833 296,277 $	December 31, 2021 Carrying amount 56,792 $ 294,296 7,196 32,517
		390,801 $
		2021
		Depreciation charge
		5,460 $ 220,602 2,807 18,881
		247,750 $

• C. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were $537,302 and $166,505, respectively.

• D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on leases of low-value or short-term assets Expense on variable lease payments Gain (loss) on lease modification	2022 2021 7,374 $ 6,383 $ 50,965 52,751 20,072 27,493 196 806) (	2021

• E. For the years ended December 31, 2022 and 2021, the Group’s total cash outflow for leases were $374,202 and $329,584, respectively.

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(11) Leasing arrangements – lessor

• A. The Group leases buildings. Rental contracts are typically made for periods of 1 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

• B. The Group recognised rental income of $88,839 and $99,240 based on operating lease contracts for the years ended December 31, 2022 and 2021, respectively. None of these included variable lease payments.

• C. The maturity analysis of lease payments in the operating lease is as follows:

		December31,2022	December31,2022	December31,2021	December31,2021
Less than 1 year	$		52,362	$	91,533
Between 1 and 5 years			8,547		53,852
Total	$		60,909	$	145,385
Investment property
			2022		2021
			Buildings		Buildings
At January 1
Cost		$	888,248	$	950,590
Accumulated depreciation	(		742,331)	(	742,953)
		$	145,917	$	207,637
Balance at January 1		$	145,917	$	207,637
Additions			512		914
Reclassifications	(		12,519)	(	16,404)
Depreciation charge	(		39,831)	(	44,636)
Net exchange differences			2,269	(	1,594)
Balance at December 31		$	96,348	$	145,917
At December 31
Cost		$	792,241	$	888,248
Accumulated depreciation	(		695,893)	(	742,331)
		$	96,348	$	145,917
A. Rental income from the lease of the investment	and		direct operating expenses		arising from the
investment property:
			2022		2021
Rental income from the lease of the investment
property		$	88,839	$	99,240
Direct operating expenses arising from the
investment property		$	54,316	$	61,756

(12) Investment property

• A. Rental income from the lease of the investment and direct operating expenses arising from the investment property:

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• B. As of December 31, 2022 and 2021, the fair value of the Group’s investments in property amounting to $1,880,320 and $2,156,294, respectively, as derived from market prices in the nearby area, are under Level 2 fair value measurement.

• (13) Short-term borrowings

December 31, 2022 : None.

Short-term borrowings December 31, 2022 : None.
Type of borrowings	December 31, 2021	Interest rate range	Collateral
Bank borrowings
Unsecured borrowings	2,000,000 $	0.68%~0.78%	None

(14) Other payables

Other payables
Accrued salary and bonus Accrued freight and import export expense Directors’ remuneration and employees’ compensation Advertising expenses payable Accrued molding expense Other accrued expenses	December31,2022 1,851,577 $ 1,070,759 956,800 495,235 354,692 1,189,213 5,918,276 $	December31,2021
		2,488,797 $ 1,780,045 1,647,800 734,784 349,850 890,400
		7,891,676 $

(15) Pensions

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

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(b) The amounts recognised in the balance sheet are as follows:

		December	31,2022		December	31,2021
Present value of defined benefit obligations		$	533,958		$	538,812
Fair value of plan assets	(		363,970)	(		326,994)
Net defined benefit liability		$	169,988		$	211,818

(c) Movements in net defined benefit liabilities are as follows:

2022 Balance at January 1 Current service cost Interest expense (income) Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Balance at December 31		Present value of defined benefit obligations	Fair value of plan assets		Net defined benefit liability
	538,812 $ 3,100 3,772 545,684 - 27,086) ( 16,966 10,120) ( - 1,606) ( 533,958 $		326,994) ($ - 2,289) ( 329,283) ( 24,272) ( - - 24,272) ( 12,021) ( 1,606 363,970) ($	211,818 $ 3,100 1,483 216,401 24,272) ( 27,086) ( 16,966 34,392) ( 12,021) ( - 169,988 $

~40~

Present value of defined benefit obligations 2021 Balance at January 1 535,344 $ Current service cost 2,862 Interest expense (income) 1,606 539,812 Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in population assumptions 440 Change in financial assumptions 20,605) ( Experience adjustments 24,754 4,589 Pension fund contribution - Paid pension 5,589) ( Balance at December 31 538,812 $	Fair value of plan assets	Net defined benefit liability
	315,030) ($ - 945) ( 315,975) ( 4,739) ( - - - 4,739) ( 11,869) ( 5,589 326,994) ($	220,314 $ 2,862 661 223,837 4,739) ( 440 20,605) ( 24,754 150) ( 11,869) ( - 211,818 $

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company and its domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and its domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2022 and 2021 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

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(e) The principal actuarial assumptions used were as follows:

2022 Discount rate 1.30% Future salary increases 2.75%	2021 0.70%
	2.75%

Assumptions regarding future mortality experience are set based on the sixth round of empirical life tables of the Taiwan life insurance industry.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

		Discountrate	Discountrate			Future salaryincreases	Future salaryincreases	Future salaryincreases
	Increase 0.25%		Decrease 0.25%		Increase 0.25%		Decrease 0.25%
December 31, 2022
Effect on present value
of defined benefit
obligation	($	10,678)	$	11,029	$	9,589	($	9,346)
December 31, 2021
Effect on present value
of defined benefit
obligation	($	12,052)	$	12,472	$	10,852	($	10,559)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

(f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2023 amount to $12,092.

• (g) As of December 31, 2022, the weighted average duration of the retirement plan is 9 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 1-2 year(s) 2-3 years 3-4 years 4-5 years 6-10 years Over 10 years	96,566 $ 23,571 20,075 25,080 39,125 155,214 235,834
	595,465 $

~42~

• B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The Company’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations.

• (c) The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2022 and 2021 were $383,763 and $319,372, respectively.

(16) Provisions for liabilities

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Warranty 2022 2021
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At January 1		$	1,203,497		$	850,435
Additional provisions			850,281			1,171,340
Used during the period	(		914,033)	(		818,343)
Exchange differences	(		6)			65
At December 31		$	1,139,739		$	1,203,497
Analysis of total provisions:
		December	31,2022		December	31,2021
Current		$	1,139,739		$	1,203,497

The Group gives warranties on computer components and personal computers sold. Provision for warranty is estimated based on historical warranty data.

(17) Share capital

As of December 31, 2022, the Company’s authorized capital was $15,000,000 (including 80,000 thousand shares reserved for employee stock options and 150,000 thousand shares reserved for convertible bonds issued by the Company), and the paid-in capital was $8,448,562 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

(18) Capital surplus

• Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. A company shall not use the capital surplus to cover its capital loss, unless the surplus reserve is insufficient to cover such loss.

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(19) Retained earnings

• A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior year's operating losses, then 10% of the remaining amount shall be set aside as legal reserve, and set aside or reverse as special reserve. The balance plus unappropriated retained earnings at the beginning of the period shall be appropriated 10%~90% as proposed by the Board of Directors, and authorize the Board of Directors to distribute all or part of the dividends in cash by supermajority vote and report the distribution plan at the stockholders’ meeting; or by issuing new stocks and resolved by the stockholders during their meeting.

• B. The Company’s dividend policy is summarized below: as the Company operates in a volatile business environment and is in the stable growth stage, except for the Company’s future expansion plans, stockholders’ interest is taken into consideration. The Group appropriated dividends in proportion to total number of shares, dividends could be distributed in stock or cash, and cash dividends shall account for at least 30% of the total dividends distributed.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

• E. The appropriations of 2021 and 2020 earnings had been resolved at the stockholders’ meeting on June 10, 2022 and July 16, 2021, respectively as follows:

Legal reserve Special reserve Cash dividend	Amount Dividends per share(dollar) Amount Dividends per share(dollar) 1,692,113 $ 795,542 $ 227,336 120,067) ( 8,870,990 10.50 $ 5,153,623 6.10 $ 2021 2020	Amount Dividends per share(dollar) Amount Dividends per share(dollar) 1,692,113 $ 795,542 $ 227,336 120,067) ( 8,870,990 10.50 $ 5,153,623 6.10 $ 2021 2020
	Amount 1,692,113 $ 227,336 8,870,990
		6.10 $

Information about earnings appropriation of the Company as resolved by Board of Directors is

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posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

• F. The appropriations of 2022 earnings had been resolved at the Board of Directors’ meeting on March 14, 2023 as follows:

March 14, 2023 as follows:
			Dividends per 2022
			Amount		share (dollar)
Legal reserve		$	999,003
Special reserve	(		198,673)
Cash dividend			5,576,051	$	6.60

As of the date of this financial report, the appropriations of 2022 earnings has not been resolved at the stockholders’ meeting.

(20) Operating revenue

• A. The Group derives revenue from the transfer of goods at a point in time in the following major segment:

==> picture [474 x 170] intentionally omitted <==

----- Start of picture text -----

Computer and
2022 peripherals segment Other Total
Total segment revenue $ 180,363,369 $ 47,873 $ 180,411,242
Timing of revenue recognition
At a point in time $ 180,363,369 $ 47,873 $ 180,411,242
Computer and
2021 peripherals segment Other Total
Total segment revenue $ 201,807,778 $ 2,374 $ 201,810,152
Timing of revenue recognition
At a point in time $ 201,807,778 $ 2,374 $ 201,810,152
----- End of picture text -----

• B. Contract liabilities

• (a) The Group has recognised the following revenue-related contract liabilities:

Contract liabilities – advance sales receipts		December31,2022		December31,2021 455,924 $	January 1, 2021
		1,297,414 $			263,152 $

• (b) Revenue recognized that was included in the contract liability balance at the beginning of the year:

year:
Revenue recognised that was included in the contract liability balance at the beginning of the period Advance sales receipts		Year ended December 31, 2022	Year ended December 31, 2021
		431,729 $	238,957 $

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(21) Interest income

Interest income
			2022			2021
Interest income from bank deposits		$	127,769		$	56,394
Interest income from financial assets measured at
amortised cost			17,914			15,651
		$	145,683		$	72,045
Other income
			2022			2021
Rental revenue		$	88,839		$	99,240
Others			550,986			772,914
		$	639,825		$	872,154
Other gains and losses
			2022			2021
Net currency exchange gains (losses)		$	1,953,452	($		720,305)
(Losses) gains on financial assets and liabilities at
fair value through profit or loss	(		1,042,127)			492,782
Net (losses) gains on disposal of property, plant
and equipment	(		748)			862
Other expenses	(		70,048)	(		42,804)
		$	840,529	($		269,465)
Expenses by nature
			2022			2021
Employee benefit expense		$	10,088,220		$	11,408,802
Depreciation charges			1,402,814			1,240,284
Amortisation charges			439			162
		$	11,491,473		$	12,649,248
Employee benefit expense
			2022			2021
Wages and salaries		$	8,737,956		$	10,243,706
Labor and health insurance fees			579,777			502,296
Pension costs			388,346			322,895
Other personnel expenses			382,141			339,905
Total		$	10,088,220		$	11,408,802

(22) Other income

(23) Other gains and losses

(24) Expenses by nature

(25) Employee benefit expense

• A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 6%~10% for employees’ compensation and shall not be higher than 1% for directors’ remuneration.

• B. For the years ended December 31, 2022 and 2021, employees’ remuneration were accrued at

• $882,000 and $1,540,000, respectively; while directors’ remuneration were accrued at $74,800

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and $107,800, respectively. The aforementioned amounts were recognised in salary expenses. The employees’ compensation and directors’ remuneration were estimated and accrued based on the historical distribution ratio and the profit of the current year for the year ended December 31, 2022.

Employees’ compensation and directors’ remuneration of 2021 as resolved at the meeting of Board of Directors were in agreement with those amounts recognised in the 2021 financial statements.

Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors and shareholders is posted in the “Market Observation Post System” website of the Taiwan Stock Exchange.

(26) Income tax

A. Income tax expense

• (a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
			2022			2021
Current tax:
Current tax on profits for the period		$	2,501,861		$	3,968,967
Prior year income tax overestimation	(		37,923)	(		44,348)
Total current tax			2,463,938			3,924,619
Deferred tax:
Origination and reversal of temporary
differences	(		142,773)	(		214,952)
Total deferred tax	(		142,773)	(		214,952)
Income tax expense		$	2,321,165		$	3,709,667

(b) The income tax charge relating to components of other comprehensive income:

		2022		2021
Remeasurement of defined benefit obligations	($	6,878)	($		30)
Unrealised losses from investments in equity
instruments measured at fair value through
other comprehensive income		6,612			9,425
	($	266)	$		9,395

• (c) The income tax charged/(credited) to equity during the period: None.

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B. Reconciliation between income tax expense and accounting profit

			2022			2021
Tax calculated based on profit before tax and
statutory tax rate (Note)		$	2,609,526		$	4,375,780
Effect from items disallowed by tax regulation			74,000			24,811
Temporary differences not recognised as
deferred tax liabilities	(		135,476)	(		308,075)
Effect from investment tax credits	(		494,113)	(		407,669)
Prior year income tax overestimation	(		37,923)	(		44,348)
Effect of different tax rates in countries in
which the group operates			5,324	(		32,494)
Tax on undistributed earnings			298,381			102,049
Other			1,446	(		387)
Income tax expense		$	2,321,165		$	3,709,667

Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Group entities operate.

• C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

investment tax credits are as follows:	ollows:
January1 Temporary differences: -Deferred tax assets: Unrealised gross profit 568,203 $ Loss on inventory 113,908 Remeasurement of defined benefit obligations 35,126 Unrealised exchange loss 15,254 Unrealised loss on financial assets at fair value through other comprehensive income 9,425 Allowance for bad debts excess tax limitation 7,201 Others 255,051 Subtotal 1,004,168 -Deferred tax liabilities: Unrealised gain on financial assets (liabilities) at fair value through profit or loss 16,621) ( Others 515) ( Subtotal 17,136) ( Total 987,032 $		2022
		Recognised in profit or loss
		36,369) ($ 144,925 - 2,902 - 4,899 21,974 138,331 10,120 5,678) ( 4,442 142,773 $

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2021

January1 Recognised in profit or loss Temporary differences: -Deferred tax assets: Unrealised gross profit 438,111 $ 130,092 $ Loss on inventory 96,541 17,367 Remeasurement of defined benefit obligations 35,156 - Unrealised exchange loss - 15,254 Unrealised loss on financial assets at fair value through other comprehensive income - - Allowance for bad debts excess tax limitation 2,277 4,924 Unrealised loss on financial assets (liabilities) at fair value through profit or loss 4,918 4,918) ( Others 192,610 62,441 Subtotal 769,613 225,160 -Deferred tax liabilities: Unrealised exchange gain 6,084) ( 6,084 Unrealised gain on financial assets (liabilities) at fair value through profit or loss - 16,621) ( Others 844) ( 329 Subtotal 6,928) ( 10,208) ( Total 762,685 $ 214,952 $	Recognised in other comprehensive income December31 - $ 568,203 $ - 113,908 30) ( 35,126 - 15,254 9,425 9,425 - 7,201 - - - 255,051 9,395 1,004,168 - - - 16,621) ( - 515) ( - 17,136) ( 9,395 $ 987,032 $	December31
		568,203 $ 113,908 35,126 15,254 9,425 7,201 - 255,051
		1,004,168
		987,032 $

D. The Company has not recognised taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2022 and 2021, the amounts of temporary difference unrecognised as deferred tax liabilities were $8,284,794 and $7,167,374, respectively.

• E. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

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(27) Earnings per share

Amount aftertax Basic earnings per share Profit attributable to ordinary shareholders of the parent 9,962,520 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 9,962,520 $ Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 9,962,520 $ Amount aftertax Basic earnings per share Profit attributable to ordinary shareholders of the parent 16,921,005 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 16,921,005 $ Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 16,921,005 $		Retroactively adjusted weighted-average outstanding ordinary Earnings per share shares (inthousands) (inNTdollars) 844,856 11.79 $ 844,856 10,111 854,967 11.65 $ Retroactively adjusted weighted-average outstanding ordinary Earnings per share shares (inthousands) (inNTdollars) 844,856 20.03 $ 844,856 10,724 855,580 19.78 $ 2022 2021

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(28) Changes in liabilities from financing activities

At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31 At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31	Short-term borrowings	Short-term borrowings	Lease liabilities	Lease liabilities		Long-term borrowings 2022		Guarantee deposits received 211,417 $ 30,576 - - 241,993 $	Liabilities from financing activities-gross
	2,000,000 $ 2,000,000) ( - - - $ Short-term borrowings		338,166 $ 295,601) ( 5,661 532,457 580,683 $			- $ - - - - $ 2021			2,549,583 $ 2,265,025) ( 5,661 532,457 822,676 $ Liabilities from financing activities-gross
		Short-term borrowings		Lease liabilities		Long-term borrowings		Guarantee deposits received
	3,000,000 $ 1,000,000) ( - - 2,000,000 $		443,730 $ 243,022) ( 16,289) ( 153,747 338,166 $		14,184 $ 13,786) ( 398) ( - - $		212,383 $ 966) ( - - 211,417 $		3,670,297 $ 1,257,774) ( 16,687) ( 153,747 2,549,583 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

None.

(2) Significant related party transactions

None.

(3) Key management compensation

Salaries and other employee benefits	2022 2021 596,943 $ 762,705 $

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

Asset items Non-current financial assets at amortised cost	December 31, December 31, 2022 2021 Purpose 650,401 $ 599,638 $ Performance security guarantee Bookvalue	Purpose

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies ： None.

• (2) Commitments ： None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

The Group passed the appropriations of 2022 earnings through the Board of Directors on March 14, 2023, please refer to Note 6(19).

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or repurchase outstanding shares.

(2) Financial instruments

A. Financial instruments by category

res or repurchase outstanding shares. ancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid	December31,2022 297,392 $ 71,791 27,475,487 655,061 179,588 18,826,732 298,360 67,948 47,872,359 $	December31,2021
		98,813 $ 104,847 23,654,801 602,186 93,220 29,590,087 292,862 99,016
		54,535,832 $

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==> picture [454 x 214] intentionally omitted <==

----- Start of picture text -----

December 31, 2022 December 31, 2021
Financial liabilities
Financial assets at fair value
through profit or loss
Financial liabilities held for
trading $ 167,284 $ 15,708
Financial liabilities at amortised
cost
-
Short-term borrowings 2,000,000
Accounts payable 24,670,649 33,931,186
Other payables 5,918,276 7,891,676
Guarantee deposits received 241,993 211,417
$ 30,998,202 $ 44,049,987
Lease liabilities $ 580,683 $ 338,166
----- End of picture text -----

B. Risk management policies

The Group’s activities expose it to a variety of financial risks: including market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency.

• iii. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk.

• iv. The Group hedges foreign exchange rate by using forward exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(2).

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• v. The Group’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: Foreign Currency Amount functionalcurrency) (In Thousands) Financial assets Monetary items USD: NTD 335,012 $ USD: RMB 61,904 EUR: NTD 23,601 Financial liabilities Monetary items USD: NTD 510,649 USD: RMB 355,726 (Foreign currency: Foreign Currency Amount functional currency) (In Thousands) Financial assets Monetary items USD: NTD 699,207 $ EUR: NTD 77,229 Financial liabilities Monetary items USD: NTD 1,304,280	Exchangerate 30.7100 6.9669 32.7200 30.7100 6.9669 December31,2022 Exchange rate 27.6800 31.3200 27.6800 December31,2021	Book Value (NTD) 10,288,221 $ 1,901,064 772,237 15,682,033 10,924,345 Book Value (NTD)
		19,354,055 $ 2,418,806 36,102,464

• vi. The exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2022 and 2021 amounted to $1,953,452 and ($720,305), respectively.

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• vii. Analysis of foreign currency market risk arising from significant foreign exchange variation:

variation:
(Foreign currency: functional currency) Degree of variation Financial assets Monetary items USD: NTD 1% USD: RMB 1% EUR: NTD 1% Financial liabilities Monetary items USD: NTD 1% USD: RMB 1% (Foreign currency: functional currency) Degree of variation Financial assets Monetary items USD: NTD 1% EUR: NTD 1% Financial liabilities Monetary items USD: NTD 1%	Effect on profit or loss (before tax) 102,882 $ 19,011 7,722 156,820 109,243 2022 Sensitivityanalysis 2021	Effect on other comprehensive income - $ - - - -
	Sensitivity analysis	Effect on other comprehensive income
	Effect on profit or loss (before tax)
	193,541 $ 24,188 361,025	- $ - -

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group has investments in equity securities. The prices of equity securities would change due to the change in the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, posttax profit for the years ended December 31, 2022 and 2021 would have increased/decreased by $781 and $0, as a result of gain or loss of equity instruments at fair value through profit or loss. Also, other components of equity would have increased/decreased by $574 and $839, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

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Cash flow and fair value interest rate risk

The Group does not have long-term borrowings, and short-term borrowings because the duration are short, so assessed to have no cash flow and fair value interest rate risk.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable, notes receivable and financial assets at amortised cost cash flow based on the agreed terms.

• ii. The Group manages their credit risk taking into consideration the entire Group’s concern. For banks and financial institutions, only parties with a rating of investment grade are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the management. The utilisation of credit limits is regularly monitored. Credit risk arises from credit exposures to wholesale and retail customers, including outstanding receivables.

• iii. The Group adopts assumptions, if the contract payments were past due over 90 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 150 days.

• v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

  • (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

  • (ii) The disappearance of an active market for that financial asset because of financial difficulties;

  • (iii) Default or delinquency in interest or principal repayments;

  • (iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

• vi. The Group applies the modified approach using provision matrix, loss rate methodology to estimate expected credit loss under the provision matrix basis.

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• vii. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• viii. The Group used the forecastability to adjust historical and timely information to assess the default possibility of debt instrument as at December 31, 2022 and 2021. The expected credit loss rate of the Group’s overdue accounts receivable was not material as of December 31, 2022 and 2021.

• ix. The Group applies the simplified approach to provide loss allowance for accounts receivable that have no significant impact. The Group had not recognized related impact as at December 31, 2022 and 2021.

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the Group’s internal balance sheet ratio targets and external regulatory or legal requirements.

• ii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

Non-derivative financial liabilities:	bilities:
December 31, 2022 Less than 1 year Accounts payable 24,670,649 $ Other payables 5,918,276 Lease liabilities 223,855 Other financial liabilities 960 Non-derivative financial liabilities: December 31, 2021 Less than 1 year Short-term borrowings 2,001,156 $ Accounts payable 33,931,186 Other payables 7,891,676 Lease liabilities 194,588 Other financial liabilities 681 Non-derivative financial liabilities:	Less than 1 year	Between 1 to 2years	Between 2 to 3years	Over 3years
		- $ - 174,918 104,134 Between 1 to 2years	- $ - 119,736 - Between 2 to 3years	- $ - 67,803 136,899 Over 3years
		- $ - - 72,142 103,008	- $ - - 33,096 -	- $ - - 38,886 107,728

Derivative financial liabilities

As of December 31, 2022 and 2021, the derivative financial liabilities mature within 1 year.

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     - iii. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

• (3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis.

  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

  • Level 3: Unobservable inputs for the asset or liability.

• B. The fair value information of the Group’s investments in property is provided in Note 6(12).

• C. Financial instruments not measured at fair value The Group’s cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable, other receivables, guarantee deposits paid, short-term borrowings, accounts payable, other payables and guarantee deposits received are approximate to their fair values. The transaction value information is provided in Note 12(2)A.

• D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

December 31, 2022 Assets: Recurring fair value measurements Financial assets at fair value through profit or loss -Equity securities -Forward exchange contract -Foreign exchange swap Financial assets at fair value through other comprehensive income -Equity securities Total Liabilities: Recurring fair value measurements Financial liabilities at fair value through profit or loss -Forward exchange contract	Level 1 97,602 $ - - - 97,602 $ - $	Level 2 - $ 6,426 193,364 - 199,790 $ 167,284 $	Level3 - $ - - 71,791 71,791 $ - $	Total
				97,602 $ 6,426 193,364 71,791
				369,183 $
				167,284 $

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==> picture [459 x 246] intentionally omitted <==

----- Start of picture text -----

December 31, 2021 Level 1 Level 2 Level 3 Total
Assets:
Recurring fair value measurements
Financial assets at fair
value through profit or loss
- -
-Forward exchange contract $ $ 40,175 $ $ 40,175
- -
-Foreign exchange swap 58,638 58,638
Financial assets at fair value through
other comprehensive income
-Equity securities - - 104,847 104,847
Total $ - $ 98,813 $ 104,847 $ 203,660
Liabilities:
Recurring fair value measurements
Financial liabilities at fair
value through profit or loss
-Forward exchange contract $ - $ 15,708 $ - $ 15,708
----- End of picture text -----

• E. The methods and assumptions the Group used to measure fair value are as follows:

• (a) The level 1 financial instruments-equity security held by the Group are listed shares, and the market quoted price is determined by the closing price of the security.

• (b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.

• (c) When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• (d) The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.

• F. For the years ended December 31, 2022 and 2021, there was no transfer between Level 1 and Level 2.

• G. For the years ended December 31, 2022 and 2021, there was no transfer in or out from Level 3.

• H. The Group entrusts an external evaluation agency to evaluate the fair value classified as Level 3.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 1.

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• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to table 2.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 3.

• I. Derivative financial instruments transactions: Please refer to Note 6(2).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 4.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 5.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 6.

• B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas: Please refer to table 7.

(4) Major shareholders information

Major shareholders information: Please refer to table 8.

14. SEGMENT INFORMATION

(1) General information and measurement of segment information

The Group operates business only in the manufacture and sale of motherboards and computer hardware and peripherals. The chief operating decision-maker is the Board of Directors, who considers the whole business as a single performance entity, and assesses performance, makes decisions and allocates resources based on financial information. It has identified that the Group has only one reportable operating segment.

(2) Information about segment profit or loss, assets and liabilities:

The Group's Board of Directors mainly evaluates the performance of the operating segments based on the Group's quarterly financial statements.

(3) Reconciliation for segment income

The Group is a single reportable segment. The profit and loss, assets and liabilities of the segment are consistent with the profit and loss, assets and liabilities shown in the financial statements, so there is no reconciliation required.

(4) Information on products and services

Revenue from external customers is mainly from the sales of computer and peripherals and related components. Details of revenue are as follows:

2022 2021 Computer and peripherals sale revenue $ 180,411,242 $ 201,810,152

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(5) Geographical information

Geographical information for the years ended December 31, 2022 and 2021 is as follows:

		2022	2022			2021	2021
		Revenue	Non-current assets			Revenue	Non-current assets
Asia	$	82,073,330	$	5,755,126	$	80,693,591	$	5,892,867
Europe		41,082,362		257,362		57,410,825		274,388
America		53,851,988		371,151		59,459,519		187,787
Others		3,403,562		2,176		4,246,217		5,470
	$	180,411,242	$	6,385,815	$	201,810,152	$	6,360,512

(6) Major customer information

The Group had no individual customer whose sales amount accounts for more than 10% of net operating revenue in the consolidated statement of comprehensive income.

~61~

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2022

Expressed in thousands of NTD

Table 1

(Except as otherwise indicated)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	As of December 31,2022	As of December 31,2022	As of December 31,2022	As of December 31,2022	Footnote
				Number of shares	Book value	Ownership (%)	Fair value
MSI (HOLDING)	SAP SE	-	Financial assets at fair value through profit or loss - current	5,000	15,769 $	-	15,769 $	-
MSI (HOLDING)	BMW	-	Financial assets at fair value through profit or loss - current	10,000	27,282	-	27,282	-
MSI (HOLDING)	Deutsche Boerse	-	Financial assets at fair value through profit or loss - current	2,000	10,562	-	10,562	-
MSI (HOLDING)	Deutsche Post	-	Financial assets at fair value through profit or loss - current	30,000	34,533	-	34,533	-
MSI (HOLDING)	Hermes International	-	Financial assets at fair value through profit or loss - current	200	9,456	-	9,456	-
MICRO-STAR INTERNATIONAL CO., LTD.	Now.gg, Inc.(Original Name: BLUESTACK SYSTEMS, INC.)	-	Financial assets at fair value through other comprehensive income - non current	516,052	71,791	-	71,791	-

Table 1 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

For the year ended December 31, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

			Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD
Table 2			(Except as otherwise indicated)
Transaction company (Note 3)	Name of the counter party (Note 3)	Relationship with the counterparty	Description of the transaction				Description and reasons of difference in transaction terms compared to third party transactions		Accounts or notes receivable (payable)		Footnote
			Purchases/(Sales)	Amount (Note 2)	% of total purchase (sale)	Credit terms	Unit price	Credit terms	Balance (Note 2)	% of total accounts or notes receivable/(payable)
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (LA)	Subsidiary	Sales	34,847,326) ($	(12)	60~100 days	-	-	7,339,535 $	21	-
MICRO-STAR INTERNATIONAL CO.,LTD.	MEGA COMPUTER	Second-tier Subsidiary	Sales	9,587,676) (	(3)	40~70 days	-	-	1,555,751	5	-
MICRO-STAR INTERNATIONAL CO.,LTD.	MYSTAR	Second-tier Subsidiary	Sales	2,265,119) (	(1)	30~100 days	-	-	193,777	1	-
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (KOREA)	Second-tier Subsidiary	Sales	5,983,832) (	(2)	50~70 days	-	-	-	-	-
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI COMPUTER (SHENZHEN)	Second-tier Subsidiary	Purchase	81,473,352	33	90-150 days	Note 1	Note 1	11,376,749) (	(36)	Note 4
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI ELECTRONICS (KUNSHAN)	Second-tier Subsidiary	Purchase	49,624,543	20	90-150 days	Note 1	Note 1	8,284,958) (	(26)	Note 4
MEGA COMPUTER	MSI (SHANGHAI)	Affiliated company	Sales	9,480,209) (	100	40-70 days	-	-	2,580,062	100	-

Note 1: The are no counterparties for comparison and the relevant transactions have been eliminated in the preparation of the consolidated financial report. Note 2: Balances after elimination in conformity with regulations.

Note 3: Corresponding transactions are not disclosed.

Note 4: The Group sold materials to the above related parties for processing and repurchased the finished goods. The sales amount of materials and repurchase price of finished goods were offset against each other and shown at net amount in the financial statements.

Table 2 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2022

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as of December 31, 2022	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts	Footnote
					Amount	Action taken
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (LA)	Subsidiary	7,339,535 $	4.13	- $	-	2,011,789 $	- $
MICRO-STAR INTERNATIONAL CO.,LTD.	MEGA COMPUTER	Second-tier Subsidiary	1,555,751	5.63	-	-	687,648	-
MICRO-STAR INTERNATIONAL CO.,LTD.	MYSTAR	Second-tier Subsidiary	193,777	9.06	-	-	163,380	-
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI COMPUTER (SHENZHEN)	Second-tier Subsidiary	6,497,132	9.80	-	-	-	-	(Note)
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI ELECTRONICS (KUNSHAN)	Second-tier Subsidiary	8,958,524	4.73	-	-	3,861,849	-	(Note)
MSI (PACIFIC)	MICRO-STAR INTERNATIONAL CO.,LTD.	Ultimate parent company	239,092	-	-	-	-	-
MSI COMPUTER (SHENZHEN)	MICRO-STAR INTERNATIONAL CO.,LTD.	Ultimate parent company	11,376,749	14.32	-	-	1,428,280	-
MSI ELECTRONICS (KUNSHAN)	MICRO-STAR INTERNATIONAL CO.,LTD.	Ultimate parent company	8,284,958	11.98	-	-	4,718,983	-
MSI (B.V.I.)	MSI (PACIFIC)	Parent Company	143,516	-	-	-	-	-
MEGA COMPUTER	MSI (SHANGHAI)	Affiliated company	2,580,062	3.43	-	-	687,648	-

Note: The Group sold materials to the above related parties for processing and repurchased the finished goods. The sales amount of materials and repurchase price of finished goods were offset against each other and shown at net amount in the financial statements.

Table 3 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Significant inter-company transactions during the year ended December 31, 2022

Expressed in thousands of NTD

Table 4

(Except as otherwise indicated)

Table 4				合併資產 46,184,753 合併營收 24,553,252 (Except as otherwise indicated)	合併資產 46,184,753 合併營收 24,553,252 (Except as otherwise indicated)	合併資產 46,184,753 合併營收 24,553,252 (Except as otherwise indicated)	合併資產 46,184,753 合併營收 24,553,252 (Except as otherwise indicated)
Number	Company name (Note 4)	Counterparty (Note 4)	Relationship	Transaction
				General ledger account	Amount (Note 1)	Transaction terms	Percentage of consolidated total operating revenues or total assets
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (KOREA)	Parent company to second-tier subsidiary	Sales	5,983,832 $	Note 2	3.32%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (LA)	Parent company to subsidiary	Sales	34,847,326	Note 2	19.32%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MEGA COMPUTER	Parent company to second-tier subsidiary	Sales	9,587,676	Note 2	5.31%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MYSTAR	Parent company to second-tier subsidiary	Sales	2,265,119	Note 2	1.26%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (LA)	Parent company to subsidiary	Accounts receivable	7,339,535	Note 2	8.45%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MEGA COMPUTER	Parent company to second-tier subsidiary	Accounts receivable	1,555,751	Note 2	1.79%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MYSTAR	Parent company to second-tier subsidiary	Accounts receivable	193,777	Note 2	0.22%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI COMPUTER (SHENZHEN)	Parent company to second-tier subsidiary	Accounts receivable	6,497,132	Note 3	7.48%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI ELECTRONICS (KUNSHAN)	Parent company to second-tier subsidiary	Accounts receivable	8,958,524	Note 3	10.31%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI COMPUTER (SHENZHEN)	Parent company to second-tier subsidiary	Purchase	81,473,352	Note 3	45.16%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI ELECTRONICS (KUNSHAN)	Parent company to second-tier subsidiary	Purchase	49,624,543	Note 3	27.51%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI COMPUTER (SHENZHEN)	Parent company to second-tier subsidiary	Accounts payable	11,376,749	Note 3	6.31%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI ELECTRONICS (KUNSHAN)	Parent company to second-tier subsidiary	Accounts payable	8,284,958	Note 3	4.59%

Table 4 Page 1

Number	Company name (Note 4)	Counterparty (Note 4)	Relationship	Transaction	Transaction	Transaction	Transaction
				General ledger account	Amount (Note 1)	Transaction terms	Percentage of consolidated total operating revenues or total assets
0	MICRO-STAR INTERNATIONAL CO., LTD.	MEGA COMPUTER	Parent company to second-tier subsidiary	Manufacturing and operating expense	208,874 $	Note 2	0.12%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (EUROPE)	Parent company to second-tier subsidiary	Manufacturing and operating expense	255,448	Note 2	0.14%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MYSTAR	Parent company to second-tier subsidiary	Manufacturing and operating expense	168,432	Note 2	0.09%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (MHK)	Parent company to second-tier subsidiary	Manufacturing and operating expense	157,646	Note 2	0.09%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (POLSKA)	Parent company to second-tier subsidiary	Manufacturing and operating expense	174,395	Note 2	0.10%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (RUSSIA)	Parent company to second-tier subsidiary	Manufacturing and operating expense	139,949	Note 2	0.08%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (LA)	Parent company to subsidiary	Manufacturing and operating expense	595,772	Note 2	0.33%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (SARL)	Parent company to second-tier subsidiary	Manufacturing and operating expense	111,648	Note 2	0.06%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (JAPAN)	Parent company to subsidiary	Manufacturing and operating expense	182,366	Note 2	0.10%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (KOREA)	Parent company to second-tier subsidiary	Manufacturing and operating expense	112,957	Note 2	0.06%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (UK)	Parent company to second-tier subsidiary	Manufacturing and operating expense	101,949	Note 2	0.06%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (HOLDING)	Parent company to subsidiary	Manufacturing and operating expense	195,775	Note 2	0.11%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (AUSTRALIA)	Parent company to subsidiary	Manufacturing and operating expense	67,493	Note 2	0.04%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (ITALY)	Parent company to subsidiary	Manufacturing and operating expense	56,441	Note 2	0.03%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (IBERIA)	Parent company to subsidiary	Manufacturing and operating expense	59,769	Note 2	0.03%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (LA)	Parent company to subsidiary	Other payables	50,510	Note 2	0.06%
1	MSI (PACIFIC)	MICRO ELECTRONICS	Subsidiary to second-tier subsidiary	Other payables	95,576	Note 3	0.11%
1	MSI (PACIFIC)	MSI (B.V.I.)	Subsidiary to second-tier subsidiary	Other payables	143,516	Note 3	0.17%
1	MSI (PACIFIC)	MICRO-STAR INTERNATIONAL CO., LTD.	Subsidiary to parent	Other receivables	239,092	Note 3	0.28%

Table 4 Page 2

Number	Company name (Note 4)	Counterparty (Note 4)	Relationship	Transaction	Transaction	Transaction	Transaction
				General ledger account	Amount (Note 1)	Transaction terms	Percentage of consolidated total operating revenues or total assets
2	MEGA COMPUTER	MSI (SHANGHAI)	Second-tier subsidiary to second-tier subsidiary	Sales	9,480,209 $	Note 2	5.25%
2	MEGA COMPUTER	MSI (SHANGHAI)	Second-tier subsidiary to second-tier subsidiary	Accounts receivable	2,580,062	Note 2	2.97%
3	MSI (LA)	RAIDEALS	Subsidiary to second-tier subsidiary	Sales	117,089	Note 2	0.06%

Note 1: Balances after elimination in conformity with regulations. Note 2: Transaction terms were approximately the same as those to third parties. Note 3: Determined based on the quantities, contract amount and delivery time. Note 4: Individual transactions not exceeding $50,000 and their corresponding transactions are not disclosed.

Table 4 Page 3

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Information on investees (not including investees in Mainland China)

For the year ended December 31, 2022

Expressed in thousands of NTD

Table 5

(Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31, 2022	Shares held as at December 31, 2022	Shares held as at December 31, 2022	Net profit (loss) of the investee for the year ended December 31, 2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
				Balance as at December 31, 2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (LA)	U.S.A	Sales and after-sales service of computers and electronic components	258,468 $	258,468 $	575,458	100.00	195,626 $	15,353) ($	15,353) ($	Direct subsidiary
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (AUSTRALIA)	Australia	Sales support and after-sales service of computers and electronic components	57,420	57,420	221,836	100.00	11,885	1,802	1,802	Direct subsidiary
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (JAPAN)	Japan	Sales support and after-sales service of computers and electronic components	20,411	20,411	1,400	100.00	22,850	3,606	3,606	Direct subsidiary
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (PACIFIC)	Cayman Islands	Holding company	1,511,382	1,511,382	30,204,118	100.00	9,307,117	864,917	636,998	Direct subsidiary
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (HOLDING)	Netherlands	Holding company	45,724	45,724	424,000	100.00	753,056	46,752	46,752	Direct subsidiary
MICRO-STAR INTERNATIONAL CO., LTD.	MSI COMPUTER (CAYMAN)	Cayman Islands	Holding company	99,093	99,093	50,000	100.00	127,992	935	935	Direct subsidiary
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (CANADA)	Canada	Sales support and after-sales service of computers and electronic components	2,150	2,150	100,000	100.00	7,989	2,640	2,640	Direct subsidiary
MSI (PACIFIC)	MSI (KOREA)	South Korea	Sales and after-sales service of computers and electronic components	24,374	24,374	80,000	100.00	375,027	5,151) (	-	Indirect subsidiary
MSI (PACIFIC)	MSI (B.V.I.)	British Virgin Island	Holding company	1,784,681	1,784,681	47,465,071	100.00	5,729,988	681,065	-	Indirect subsidiary
MSI (PACIFIC)	MICRO ELECTRONICS	British Virgin Island	Holding company	1,168,593	1,168,593	33,315,472	100.00	3,548,149	298,192	-	Indirect subsidiary
MSI (PACIFIC)	STAR INFORMATION	British Virgin Island	Holding company	-	144,721	-	-	-	47) (	-	Indirect subsidiary

Table 5 Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31, 2022	Shares held as at December 31, 2022	Shares held as at December 31, 2022	Net profit (loss) of the investee for the year ended December 31, 2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
				Balance as at December 31, 2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value
MSI (PACIFIC)	MEGA TECHNOLOGY	British Virgin Island	Holding company	92,819 $	92,819 $	3,050,000	100.00	6,019 $	170) ($	- $	Indirect subsidiary
MSI (PACIFIC)	MEGA COMPUTER	Hong Kong	Sales support of computers and electronic components	-	-	1	100.00	4,026	41) (	-	Indirect subsidiary
MSI (PACIFIC)	MSI (MHK)	Hong Kong	Sales support of computers and electronic components	-	-	1	100.00	31,515	5,072	-	Indirect subsidiary
MSI (HOLDING)	MYSTAR	Netherlands	Sales support of computers and electronic components	71,353	71,353	-	100.00	215,447	24,431	-	Indirect subsidiary
MSI (HOLDING)	MSI (RUSSIA)	Russia	Sales support and after-sales service of computers and electronic components	68,258	68,258	-	99.00	44,285	3,667	-	Indirect subsidiary
MSI (HOLDING)	MSI (POLSKA)	Poland	Sales support and after-sales service of computers and electronic components	46,077	46,077	-	99.00	38,099	3,459	-	Indirect subsidiary
MSI (HOLDING)	MSI (SARL)	France	Sales support of computers and electronic components	26,646	26,646	-	100.00	50,993	5,489	-	Indirect subsidiary
MSI (HOLDING)	MSI (UK)	Britan	Sales support of computers and electronic components	37,226	37,226	-	100.00	27,862	5,173	-	Indirect subsidiary
MSI (HOLDING)	MSI (TURKEY)	Turkey	Sales support of computers and electronic components	3,229	3,229	-	99.00	43) (	-	-	Indirect subsidiary (Note 2)
MSI (HOLDING)	MSI (ITALY)	Italy	Sales support of computers and electronic components	2,153	2,153	-	100.00	7,763	2,227	-	Indirect subsidiary
MSI (HOLDING)	MSI (EUROPE)	Netherlands	Logistics services of computers and electronic components	37,620	37,620	-	100.00	57,604	2,120	-	Indirect subsidiary
MSI (HOLDING)	MSI (IBERIA)	Spain	Sales support of computers and electronic components	5,177	5,177	-	100.00	11,413	1,526	-	Indirect subsidiary
MSI (EUROPE)	MSI (RUSSIA)	Russia	Sales support and after-sales service of computers and electronic components	689	689	-	1.00	523	3,667	-	Indirect subsidiary

Table 5 Page 2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31, 2022	Shares held as at December 31, 2022	Shares held as at December 31, 2022	Net profit (loss) of the investee for the year ended December 31, 2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
				Balance as at December 31, 2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value
MSI (EUROPE)	MSI (POLSKA)	Poland	Sales support and after-sales service of computers and electronic components	467 $	467 $	-	1.00	167 $	3,459 $	- $	Indirect subsidiary
MSI (EUROPE)	MSI (TURKEY)	Turkey	Sales support of computers and electronic components	33	33	-	1.00	25	-	-	Indirect subsidiary (Note 2)
MEGA TECHNOLOGY	RAIDEALS	U.S.A	Sales of computers and electronic components	1,523	1,523	-	100.00	2,419	203	-	Indirect subsidiary

Note 1: The table is presented in New Taiwan dollars. Except for the initial investment amount is valued at historical exchange rate, the others are valued with exchange rate 1USD=30.71NTD ；1EUR=32.72 NTD on December 31, 2022 and average rate with 1USD=29.7816NTD;1EUR=31.3363 NTD for the year ended December 31, 2022.

Note 2: As of December 31, 2022, the liquidation process has not been completed.

Table 5 Page 3

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Information on investments in Mainland China - Basic information

For the year ended December 31, 2022

Expressed in thousands of NTD

Table 6

(Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31, 2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31, 2022	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2022	Net income of investee as of December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2022 (Note 2)	Book value of investments in Mainland China as of December 31, 2022	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
MSI COMPUTER (SHENZHEN)	Manufacture and after-sales service of computers, and electronic components	$ 1,726,857	Note 1	1,726,857 $	- $	- $	1,726,857 $	681,064 $	100.00	681,064 $	5,567,998 $	- $	-
MSI ELECTRONICS (KUNSHAN)	Manufacture and after-sales service of computers, and electronic components	1,772,675	Note 1	1,772,675	-	-	1,772,675	298,214	100.00	298,214	3,440,015	-	-
SHENZHEN MEGA INFORMATION	After-sales service of computers, and electronic components	23,940	Note 1	23,940	-	-	23,940	571	100.00	571	23,879	-	-
MSI (SHANGHAI)	Sales and after-sales service of computers and electronic components	29,275	Note 1	-	-	-	-	79,235) (	100.00	79,235) (	80,215) (	-	Note 3
Companyname		Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022		Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)			Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA 29,039,153 $
MICRO-STAR INTERNATIONAL CO., LTD.		3,602,547 $		3,850,987 $

Note 1: The investments were made indirectly through 100% owned subsidiary of the Company. Note 2: Evaluated based on financial statement not reviewed by other auditors of the investee companies.

Note 3: The amount of US $1,000 thousand was remitted by the Company's subsidiary, MSI (Pacific), to MSI (SHANGHAI).

Note 4: In pursuance of Shen-Zi Letter No.09704604680 from the Ministry of Economic Affairs dated August 29, 2008. The amended "Regulations for examination of investments and technical cooperation in Mainland Area" sets the limitation for investments in Mainland China to be higher of net book value or 60% of consolidated net book value. Note 5: The table is presented in New Taiwan dollars. Except for the initial investment amount is valued at historical exchange rate, the others are valued with exchange rate 1USD=30.71 NTD on December 31, 2022 and average rate with 1USD=29.7816 NTD for the year ended December 31, 2022.

Table 6 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Information on investments in Mainland China - Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in third areas

For the year ended December 31, 2022

Expressed in thousands of NTD

Table 7

(Except as otherwise indicated)

Investee in Mainland China	Sales/(Purchase)	Sales/(Purchase)	Propertytransaction	Propertytransaction	Accounts receivable/(payable)	Accounts receivable/(payable)	Amount of endorsements/guarantees secured with collaterals	Amount of endorsements/guarantees secured with collaterals		Accommodation of funds	Accommodation of funds		Others
	Amount	%	Amount	%	Balance as of December 31,2022	%	Balance as of December 31,2022	Purpose	Ceiling amount	Balance as of December 31,2022	Interest rate range	Interest expense
MSI COMPUTER (SHENZHEN) MSI ELECTRONICS (KUNSHAN) MSI COMPUTER (SHENZHEN) MSI ELECTRONICS (KUNSHAN) MSI (SHANGHAI)	$ - - ( 81,473,352) ( 49,624,543) 9,480,209	- - 33) ( 20) ( 100) (	$ - - - - -	- - - - -	$ 6,497,132 8,958,524 ( 11,376,749) ( 8,284,958) 2,580,062	19 26 36) ( 26) ( 100	$ - - - - -	- - - - -	$ - - - - -	$ - - - - -	- - - - -	$ - - - - -	$ - - - - -

Table 7 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Major shareholders information

December 31, 2022

Table 8

Name of major shareholders	Shares held as at December 31,2022	Shares held as at December 31,2022
	Number of shares	Ownership(%)
Hsu Hsiang	46,883,151	5.54%

Table 8 Page 1